Washington Venture Bets Provide Top Fund Performers

Certain funds in Washington State Investment Board’s venture portfolio are reaping in the rewards according to its most recent IRR report..

The fund has exposure to well-established names such as Austin Ventures, Menlo Venture Partners, New Enterprise Associates, Oak Investment Partners and Phoenix Equity Partners to name but a few. The IRR report reveals that the fund’s total venture investments generated an IRR of 10.44% and investment multiple of 1.4x on committed capital of $3.6 billion. This was slightly lower than the IRR for the total private equity portfolio which stood at 12.98% and also had an investment multiple of 1.4x.

Its biggest venture commitment is in venture fund-of-funds Pathway Portfolio Venture Capital at $1.01 billion with $888.8 million drawn down and $570.3 million of distributions which so far has a total value (distributions + value of portfolio) of $1.13 billion, IRR of 9.47% and investment multiple of 1.3x.

This is the third largest commitment of the pension fund – its first two equally large commitments go to KRR with $1.5 billion backing KKR 2006 Fund, L.P. and the same amount going to KKR Millennium Fund, L.P.

And while venture showcased the highest IRR for Washington, buyout funds came second with GTCR Fund VII-A, L.P. posting a 83.01% IRR on a 2.8x multiple. Washington committed $31.2 million to that fund and with 20.7 million drawn down, the fund so far has a total value of $57.8 million.

Also doing consistently well for Washington are European buyout funds. Doughty Hanson Fund II tops the list generating an IRR of 48.83% and investment multiple of 2.1% on $16.5 million of committed capital. This is followed by Charterhouse Capital Partners VII which has so far generated an IRR of 40.02% and investment multiple of 2x on committed capital of $141.1 million.

Other European buyout funds in the portfolio include Apax Europe V-A, which has so far generated an IRR of 36.53% and investment multiple of 2.1x on $140.1 million of committed capital; Cinven Third Fund, which has produced an IRR of 32.02% and investment multiple of 1.9x on $129.4 million of committed capital. And finally Northern European investor Nordic Capital Fund III which has so far returned a 31.30% IRR and investment multiple of 3.6% on committed capital of $47.1 million.

The slideshow of the top five performing venture funds (in ascending order) providing above average returns in Washington’s portfolio based on data in its IRR report is below.